Activists set sights on Israeli companies

Activist shareholders are waking up to the opportunities presented by a maturing Israeli stock market, according to new data from Activist Insight.

Twelve companies were targeted over the last 18 months, the activist research firm says. While that’s not a high number by comparison with markets accustomed to activist activities like the US, the number is equal to all the campaigns seen over the previous three years.

Seventy percent of the companies targeted were in the healthcare or technology sector, and Activist Insight warns that ‘Israel’s abundance of companies in favorite activist sectors such as pharmaceuticals, biotech and software, as well as its open market, are likely reasons it has remained a popular source of targets.’

Just 35 percent of public campaigns were waged by foreign investors, with dual-listed firms the most likely targets, according to local practitioners. But Activist Insight notes a growing domestic activist scene as well. 

‘Shareholders have taken advantage of Israeli law, which allows 1 percent shareholders to nominate directors,’ explains Activist Insight in a press statement, adding that ‘68 percent of demands were board-related, with only 9 percent M&A-related due to a sometimes protectionist culture. But advisers familiar with proxy fights in the country say they can be contested – ending up in litigation.’

Israel also appears to be a ‘popular hunting ground’ for short-sellers, with 21 campaigns against Israel-headquartered companies since 2013.